Gap raises outlook as Q2 profit surges 25%; bringing Old Navy to Shanghai
San Francisco -- A resurgent Gap Inc. reported that its second quarter profit jumped 25% on strong sales of denim and other goods at its namesake and Old Navy brands. And bucking a trend set by other retailers, the company raised its full-year earnings guidance. Gap also detailed upcoming expansion plans.
“We delivered strength in both our top and bottom lines this quarter,” said Glenn Murphy, chairman and CEO of Gap. “As we move into the second half of the year, we remain focused on growing revenue and driving continued momentum across our portfolio of brands.”
Gap earned $303 million for the quarter ended Aug. 3, up from $243 million in the year ago period.
Revenue increased 8.1 % to $3.87 billion, in line with Wall Street expectations. Same-store sales rose 5%, with 6% gains at Gap and Old Navy and a 1% decline at Banana Republic.
In line with its strategy to expand Old Navy internationally, Gap said it will open the brand’s first store in Shanghai and launch an Old Navy e-commerce site in China in the first half of 2014.
The company also announced that it is bringing the Gap brand to Taiwan with its first store opening in the first half of 2014, along with a Gap e-commerce site.
With regards to its newest U.S. format, Athleta, the retailer said it opened six Athleta stores in the second quarter, for a total of 46 stores. It’s on track to end fiscal 2013 with about 65 stores.